UK payday loaners cop MEGA £175K fine for 'misleading' SMS spam

A UK-based payday loans firm has received a £175,000 fine after it was found to have sent millions of spam text messages that provoked thousands of complaints.

First Financial violated The Privacy and Electronic Communications Regulations governing electronic marketing by sending SMS messages without consent. The messages included some falsely claiming to be from the recipient’s friends, included SMS messages such as "Hi Mate hows u? I'm still out in town, just got £850 in my account from these guys www.firstpaydayloanuk.co.uk".

The tactics provoked thousands of complaints to data privacy watchdogs at the UK's Information Commissioner’s Office (ICO), as well as a separate regulatory action from the Advertising Standards Authority, which upheld three topics of complaint against the firm in June, ordering it not to repeat the offending behaviour.

An ICO investigation traced 4,031 of the offending messages that became the subject of complaints back to First Financial.

The spam texts were sent using unregistered SIM cards, a common method used to avoid detection. However the content of the message was similar on each occasion and referred recipients to a website belonging to firstpaydayloanuk.co.uk, a trading name used by First Financial.

The fine against First financial is not the heaviest ever levied by the ICO (Sony received a fine of £250,000 for the 2011 breach of the PlayStation Network) but it is the among the most severe ever imposed by the data protection watchdogs.

The bumper penalty comes after First Financial’s former sole director, Hamed Shabani, was prosecuted in October and fined £1,180 over failure to notify the ICO that the firm was processing personal information with the ICO, a legal requirement under the Data Protection Act. Before the hearing before City of London Magistrates Court Shabani had attempted to remove his name from the company’s registration at Companies House in order to avoid prosecution.

Anyone who receives an unsolicited text message is advised to avoid replying and report the message using forms available on the ICO website. Over 200,000 responses have been sent in since the reporting system was setup early last year. The information provided is being used to help identify those companies responsible from bombarding the public with annoying and frequently misleading SMS spam.

UK consumers can also report offending spam texts to your network operator by sending them to shortcode "7726". Mobile networks are working to block the "worst offenders", according to the ICO. ICO Director of Operations, Simon Entwisle, said that data privacy watchdogs will continue to aggressively pursue text message spammers. “People are fed up with this menace and they are not willing to be bombarded with nuisance calls and text messages at all times of the day trying to get them to sign up to high interest loans," Entwisle said in a statement. "The fact that this individual tried to distance himself from the unlawful activities of his company shows the kind of individuals we’re dealing with here."

“We will continue to target these companies that continue to blight the daily lives of people across the UK. We are also currently speaking with the government to get the legal bar lowered, allowing us to take action at a much earlier stage.”

Any monetary penalty collected from First Financial as a result of the ICO's latest enforcement action will be paid into the Treasury’s Consolidated Fund.

The ICO has published detailed guidance (PDF) for direct marketers explaining their legal requirements under the Data Protection Act and Privacy and Electronic Communications Regulations. The guidance covers the circumstances in which organisations are able to carry out marketing over the phone, by text, by email, by post or by fax. ®